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DSME Wins US$273 Mil. Contract for Three VLCCs from Hunter Tankers
A New Order from Norwegian Client
DSME Wins US$273 Mil. Contract for Three VLCCs from Hunter Tankers
  • By Jung Min-hee
  • November 6, 2018, 10:58
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Daewoo Shipbuilding & Marine Engineering President Jung Sung-leep (right) and Arne Fredly, a member of the board of directors of Hunter Group ASA, shake hands after signing a VLCC building contract in Oslo, Norway on Nov. 2 (local time).

Daewoo Shipbuilding & Marine Engineering (DSME) announced on Nov. 5 that it has signed a US$273 million contract with Hunter Tankers in Oslo, Norway to build three very large crude carriers (VLCCs). Hunter Tankers, a subsidiary of the Norwegian Hunter Group, entered the shipping industry in February this year by concluding a VLCC building contract with DSME.

The three VLCCs are divided into one already confirmed and two optional. The latter are likely to lead to actual contracts in that Hunter Tankers ordered no less than 10 VLCCs from DSME this year alone and is planning to keep expanding its fleet.

The former is expected to have a length of 336 meters and a width of 60 meters. The VLCCs scheduled to be delivered to Hunter Tankers by DSME have the same design and specifications, helping DSME improve its productivity and profitability.

According to industry sources, a total of 41 VLCC building contracts were signed around the world this year and DSME clinched 18 out of the total to be second to none. According to Clarkson data, the average VLCC price dipped below US$90 million in June 2016 yet rebounded to US$90 million in August this year. The recent contract between DSME and Hunter Tankers is the first contract with a unit price of more than US$90 million since the rebound.

This year, DSME concluded 38 shipbuilding contracts, worth US$4.86 billion in total. The contracts consist of 12 for LNG carriers, 18 for VLCCs, seven for large container carriers and one for a special-purpose ship. The company’s performance for this year is a four-year high and is equivalent to 67% of the company’s goal for this year.